Exclusive: Johnson Controls explores auto unit sale- sources

March 13, 2013|Soyoung Kim and Bernie Woodall | Reuters

(Larry Downing Reuters, )

NEW YORK (Reuters) - Johnson Controls Inc is exploring a potential sale of its automotive electronics business, but has no "current intention" to sell its automotive interiors unit, the company said on Wednesday.

Three people familiar with the matter told Reuters earlier on Wednesday that the diversified conglomerate was looking to sell its automotive interiors division.

Two of them later corrected the statement, saying they were referring to the electronics part of the automotive interiors and electronics segment, which accounts for a quarter of the division's sales.

Johnson Controls' automotive electronics business had sales of $1.4 billion in fiscal 2012. Its automotive interiors business had sales of $4.1 billion.

Johnson Controls said it has retained JPMorgan to run the sale process for car electronics. The deal could fetch more than $1 billion, according to the two people familiar with the matter.

Shares of Johnson Controls closed up 2.6 percent at $32.63 on the New York Stock Exchange after the company's statement. After the Reuters report earlier in the day, shares rose as high as 7.6 percent.

Johnson Controls, the largest U.S. auto supplier, has grappled with industry-wide pressure on margins, low vehicle production in Europe and increased competition from China.

A successful sale would leave Johnson Controls with three other major business: automotive seating, building controls and car batteries.

(This story, first published on March 6, corrects paragraphs one through five to show that JCI is selling its electronics unit, not interiors)

(Reporting by Soyoung Kim in New York and Bernie Woodall in Detroit; editing by Carol Bishopric)